I have a situation and I was hoping someone could provide some clarification on:

 We (My employer) are currently in the process of conciliation with an employee. A settlement agreement has almost been reached but one of the requests the employee has is that they set the terms / reason for termination of employment – e.g. redundancy.

The background to the situation is that the employee underwent a capability process, failed to meet the required performance standards and went off sick prior to a pre-set hearing date. The employee had remained off sick for over a year and a half and has communicated that they do not wish to return to work (Via mediators)

 My question is, is the company at any risk if they are to agree to this term (Agreeing that the terms /reason for termination is redundancy)?

 Thank you